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NEW QUESTION 32
In which conflict resolution method is communication predominately written rather than spoken?

• A. negotiation
• B. conciliation
• C. arbitration
• D. adjudication

Answer: D

Explanation:
Adjudication is written. The other conflict resolution methods involve talking to the other person, or presenting arguments orally to a judge. See p.77 for more info.

NEW QUESTION 33
John is a chocolatier and has a big order of Easter Eggs coming up in April. He also creates chocolates to sell all year round in his shop, but Easter Eggs represent a large proportion of his profits each year. John's chocolate making machine has just broken and he has ordered a new one to be delivered in February. However due to a delay, the manufacturer of the new machine can't deliver until May. What course of action can John take?

• A. John can claim for loss of his regular earnings but not for the easter eggs
• B. John can claim for both the loss of the Easter Eggs and his regular earnings
• C. John cannot claim for any loss as these are in the future and he doesn't know what these would be
• D. John can claim for the loss of the Easter Eggs but not his regular earnings

Answer: B

Explanation:
3 is the correct answer. This question is testing your understanding of 'consequential loss' which is explained on p.109. Consequential loss is where you can claim damages for incidental loss (loss that isn't a direct cause of the breach of the contract, such as future earnings). In this scenario the breach is the late delivery and the incidental damage is John not being able to sell any chocolate in his shop or make his Easter Eggs. There are questions like this in the real exam- remember to think what the textbook would say and don't overthink this. The scenario doesn't always give you a lot of information (for example this doesn't say if there is a contract in place) so think- which of these four options is the most logical and what is this question trying to test me on.

NEW QUESTION 34
When there has been a major breach in a contract, the contract will be terminated. Is this statement true?

• A. no- the contract can continue if the offending party proves that further breaches won't occur
• B. no- the contract can be affirmed by the injured party
• C. yes- the contract will be terminated and damages sought
• D. yes- the contract must be terminated as there is no means by which the contract could continue after a major breach

Answer: B

Explanation:
"no- the contract can be affirmed by the injured party" is the correct answer. When there is a breach in a condition, one of two things can happen; the contract is terminated, or the contract is affirmed. The injured party has the choice of whether or not they want to continue working with the other party and this is called 'affirmirmation of the contract'. The contract doesn't HAVE to be terminated in the case of a major breach so options 1 and 2 are incorrect. Option 4 is also incorrect- the contract can continue even if the offending party says they'll commit further breaches - it's completely up to the injured party whether they want to continue working with them or not. See p. 46 for further details

NEW QUESTION 35
Harry is negotiating a contract for a new IT system for his business. He is investing heavily in the system and wants the system to be able to provide the services he requires for the next 10 years. However he is aware that technology is changing quickly and would like to include a clause in the contract to ensure that the system he is purchasing is useable for the next 10 years. What should Harry include in the contract?

• A. limitation of liability
• B. service credits
• C. benchmarking
• D. change control

Answer: C

Explanation:
Benchmarking should be included- this is common in long-term contracts where variables can af-fect the market over time. By including benchmarking, harry gets assurance that the product he purchases will meet the market expectations over the next 10 years. The other answers are incorrect; 1- there is no mention of liability in the question so this is incorrect. 2- service credits would be used if he is concerned the product would be offline/ not perform (it's a form of damages) but this isn't the case in this scenario. He's not worried about underperformance, he's worried about obsolescence. 4- change control is for when there are multiple versions of a contract due to amendments being made.

NEW QUESTION 36
A buyer and supplier have a contract and the supplier has committed a major breach. However, as they are the sole supplier to the buyer, the buyer has decided not to terminate the contract and instead to work with the supplier to remedy the situation. What is this called?

• A. conflict resolution
• B. affirmation of the contract
• C. assigning liability
• D. awarding damages

Answer: B

Explanation:
This is affirmation of the contract. When a breach occurs the injured party has two options; termi-nate the contract or affirm the contract. In this example they have affirmed the contract- they have chosen to continue working with the offending party. See p.60.

NEW QUESTION 37
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